What’s New in Weeklys – 9/18/2013

There are no additions or deletions on the Weeklys list that came out today. However, in response to a question I got during a webcast, I did a quick count of what is on the list. There are 269 underlying markets with short dated options available tomorrow morning. Of those 130 have serial options available. This means there are contracts trading through each of the next five Fridays. Since we are just about to enter earnings season in a few weeks this is going to enhance the ability to trade around the extra volatility that occurs around earnings announcements.

Speaking of earnings, there are three stocks with short dated options available that report earnings next week. On Wednesday Accenture (ACN – 77.79) and Nike (NKE – 69.48) are scheduled to report their numbers after the close. On Thursday before the market opens we will get an update from Blackberry (BBRY – 10.40) as they release their numbers.

ACN will report next Wednesday afternoon (9/25). I normally do not comment on the fundamental earnings numbers and focus more on what the stock has done in reaction to earnings in the past, but something stood out when I looked at Accenture’s earnings history. The company has beaten the consensus Wall Street estimate for 13 quarters in a row. The last time they missed the number was in March of 2010. However, do be aware that despite beating the number several times in a row the stock can sell off after earnings. The stock’s earnings reaction three months ago was a drop of 10.3%. The absolute average of the price change after earnings has been less than half this 10% drop. Looking at the last twelve earnings releases, the average the stock moves higher or lower is by 4.3%. It will be interesting to see what the market prices in leading up to the earnings release.

NKE also releases earnings next Wednesday afternoon. The average earning reaction for NKE over the last twelve reports has been 5.7%. The last report resulted in a 2.2% price change so it may be interesting to see if low volatility is priced going into NKE’s earnings based on the muted reaction three months ago.

Rounding out high profile earnings releases for next week will be Blackberry which reports Thursday before the open. BBRY dropped 27.8% on the last earnings release and lost 0.8% two earnings releases ago. The average move is about 12.4% higher or lower as the company has been going through a transitional phase. Needless to say, this is always fun one to watch.

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and… read more

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